License bill could create IT headaches

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By Patrick Thibodeau

(IDG) -- Congress this week is expected to consider legislation requiring national uniform standards for driver's licenses. The intent is to improve security, an issue of importance to businesses that swipe or scan driver's licenses to authenticate customers.

But creating a driver's license standard would require law enforcement agencies and businesses such as airlines and convenience stores to adopt common scanning and identification systems to proof the licenses, and the trickle-down effect could be costly to both the public and private sectors.

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For instance, the Food Marketing Institute in Washington, which represents some 26,000 retail food stores, estimated that changes in the magnetic stripe standard alone could cost its supermarket retailers $175 million in upgrade costs.

Interoperability Key

In the meantime, "if you go straight to [adopting a] smart card, you are going to leave millions of terminals at cash registers and airline counters unable to read the card," said Richard Varn, CIO for the state of Iowa and one of the leaders in the state's effort to improve driver's license security. That would be a mistake, he said.

"You don't want to end up with a counter full of readers for different state cards, so you have to work on standards and interoperability," said Varn.

Key to a successful authentication system will be back-end databases with reliable information maintained by state and federal authorities that businesses can access, Varn said. "A dumb card with smart networks and good databases can do just as well as a smart card," he said.

Legislation being finalized by U.S. Sen. Richard "Dick" Durbin (D-Illinois), chairman of the Senate Subcommittee on Oversight of Government Management, would require states to develop a minimum verification and identification standard. It also seeks unique identifiers encoded in each license.

If Congress passes the bill, law enforcement officials and businesses would then have three years to adopt the necessary technologies to scan and identify the licenses.

While there's no standard for driver's licenses, the magnetic strip is the most frequently used technology. But some states are using 2-D or 3-D bar codes, and others are eyeing smart cards.

John Hervey, chief technical officer at the Alexandria, Virginia-based National Association of Convenience Stores (NACS), said his biggest concern is backward compatibility with existing systems.

Many retailers, including the 130,000 stores represented by the NACS, use magnetic strip readers for everything from credit cards to driver's licenses. Changing those systems would cost millions of dollars, Hervey said.

"I don't think you can do away with mag stripe technology immediately," said Hervey, who believes that a driver's license could incorporate multiple technologies that could satisfy magnetic strips as well as bar code readers.

Privacy issues will also be significant. By swiping driver's licenses, a business can capture that data and use it for customer relationship management, which scares some privacy advocates. Putting limits on what businesses can do with that data will likely be part of the debate.